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Global Supply Chains: When Uncertainty is a Certain Factor

Predicting the future is never easy, but MIT attempted to do just that when its Supply Chain 2020 Project identified six major trends that supply networks will have to cope with in the years ahead.

By Larry Lapide ·
March 1, 2014

The future ain’t what it used to be.” That somewhat nonsensical quote from the former New York Yankee baseball player Yogi Berra was the whimsical, yet apropos tagline for the MIT Supply Chain 2020 (SC2020) Project. I managed the project’s launch in 2004, and it continues today, focusing on what excellent supply chains would look like 10 to 15 years in the future.

Having come from a largely consulting background prior to joining MIT’s Center for Transportation & Logistics, I initially thought that successful supply chains in the future would leverage best practice trends that I had been seeing over the past five to 10 years, such as Just-in-Time (JIT) and lean operations as well as supply chain visibility and collaboration. After peeking into the future for a while, I realized these trends were based upon where the world had been recently moving, not necessarily on where it might be in the future. And, these so-called best practices might be rendered useless. I came to realize that my own view of the future “wasn’t what it used to be;” hence, the genesis of the SC2020 Project tagline.

The MIT team decided to approach the project using a Scenario Planning methodology, rather than try to do the impossible and predict the state of the world 10 to 15 years out. Our interests moved to identifying reasonable scenarios for the future, such as the worlds that supply chains might be operating in as well as the uncertainties around them. The six major factors that we feel will most affect future supply chains are: 1) the aging of developed countries; 2) oil prices; 3) a power shift toward the East; 4) trading bloc formation; 5) globalized Green Laws; and 6) pervasive technologies.

The future ain’t what it used to be.” That somewhat nonsensical quote from the former New York Yankee baseball player Yogi Berra was the whimsical, yet apropos tagline for the MIT Supply Chain 2020 (SC2020) Project. I managed the project’s launch in 2004, and it continues today, focusing on what excellent supply chains would look like 10 to 15 years in the future.

Having come from a largely consulting background prior to joining MIT’s Center for Transportation & Logistics, I initially thought that successful supply chains in the future would leverage best practice trends that I had been seeing over the past five to 10 years, such as Just-in-Time (JIT) and lean operations as well as supply chain visibility and collaboration. After peeking into the future for a while, I realized these trends were based upon where the world had been recently moving, not necessarily on where it might be in the future. And, these so-called best practices might be rendered useless. I came to realize that my own view of the future “wasn’t what it used to be;” hence, the genesis of the SC2020 Project tagline.

The MIT team decided to approach the project using a Scenario Planning methodology, rather than try to do the impossible and predict the state of the world 10 to 15 years out. Our interests moved to identifying reasonable scenarios for the future, such as the worlds that supply chains might be operating in as well as the uncertainties around them. The six major factors that we feel will most affect future supply chains are: 1) the aging of developed countries; 2) oil prices; 3) a power shift toward the East; 4) trading bloc formation; 5) globalized Green Laws; and 6) pervasive technologies.

If history is our guide, economies take a turn every nine years. Yet time and again, a strong business cycle and fading memories convince us the good times will go on forever. Ten years after the great recession, we surveyed 100 manufacturing firms to find out if businesses are ready to fight through the next recession.

Is Digital Transformation a risk or an opportunity? This webinar will detail Manufacturing industry challenges and how using IoT can address these challenges through optimizing logistics, improving processes and gaining meaningful insights.